This week in China: Renminbi is strong, ocean is deep

Expatriates in China who have been remiss in their remittances home – be they mortgage payments, alimony, or child support – now have a clever excuse to hand: “Sorry, honey, I was just playing the exchange rate. We’ll get Billy out of jail next week. Keep the change and buy yourself something nice.” That’s right, all those renminbi piled up in foreigners’ accounts were worth RMB6.45 to the dollar on Wednesday, a 17-year high. China’s overseas community celebrated by spending three times as much on beer as it used to and screaming, uselessly, at motley peddlers of vegetables and fruits that tomatoes can’t possibly cost that much. But Beijing hopes that a stronger renminbi will alleviate domestic inflation, which it should, in part by making imported beer relatively cheaper. But it’s bad for Chinese exports, and it’s also bad for the relative value of China’s foreign exchange reserves. The State Administration of Foreign Exchange (SAFE) is being lambasted for not living up to its acronym; the agency, critics say, has over-invested China’s forex reserves in US dollar assets, which means that the renminbi value of SAFE’s investments have declined dramatically thanks to a weaker dollar. Nonsense! said SAFE. The foreign reserves can only lose value if they are changed back into renminbi; in the US, they still buy just as much political influence as they did before. Ahem. SAFE did admit that there are “certain challenges” involved in managing forex reserves. For example, apparently the US Treasury has stopped returning its calls for some reason. But everything is fine, just fine. Really, it’s fine.

Deep sea fishin’

They say that the first humans to walk on Mars may be Chinese. Could be, could be: Apparently the China Exim Bank has already prepared a loan package for Martian infrastructure development, and a host of construction SOEs are lining up to offer their services, although they would prefer to import Chinese laborers – those little green men just sing and dance and sleep all day. Cute, but lazy! Anyway, Beijing is not satisfied with reaching for the stars: It also plans to go deeper than any man has ever gone before. On July 1, the Jiaolong submersible set sail for the northeastern Pacific, where it will attempt to take a crew down 5,000 meters (16,400 feet), beating the record set by the US in 1960. While the mission to Mars is unlikely to produce much return on investment, the submarine mission will ignore the funny-lookin’ fish, decline battle with the Kracken, and get straight to the point: finding precious minerals, bringing them home, and refusing to export them to Japan.

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